INVOICE INVESTIGATION
Which piece of information is especially important for helping AP detect a duplicate invoice?
A. Vendor phone number
B. Invoice number
C. Shipping method
D. Requestor's department
B. Invoice number — Helps prevent duplicate payments.
Which matching method compares the PO and invoice based on dollars only?
A. Three-way match
B. Two-way match
C. ERS
D. VIDA
B. Two-way match — Compares the PO and invoice without a receiving document.
Which payment method is known for being low-cost, flexible, and fast?
A. Paper check
B. ACH
C. Petty cash
D. Wire transfer
B. ACH — Low-cost electronic payment method.
Which situation creates a major fraud risk?
A. Check stock stored securely
B. Separate employees performing payment duties
C. Blank check stock accessible to anyone in AP
D. Payments reviewed before release
C. Blank check stock accessible to anyone in AP — Creates major fraud risk.
A company allows small PO and invoice differences to be processed without investigation. What is this called?
A. Tolerance
B. Negative assurance
C. ERS
D. VIDA
A. Tolerance — Allows small approved invoice differences.
A $5,000 invoice receives a $500 credit memo. How should AP enter it?
A. Enter one invoice for $4,500
B. Enter the $5,000 invoice and $500 credit separately
C. Delete the original invoice
D. Change the PO to $4,500
B. Enter the $5,000 invoice and $500 credit separately — Keeps the invoice and credit clear.
Which three documents make up a traditional three-way match?
A. Invoice + PO + receiving document
B. Invoice + check + bank statement
C. PO + check + vendor statement
D. Invoice + GL + remittance advice
A. Invoice + PO + receiving document — The three-way match.
A card number is created for one specific supplier payment and cannot be reused afterward. What is it?
A. Ghost card
B. P-card
C. Single-use virtual card
D. Travel card
C. Single-use virtual card — Used for one transaction only.
An employee authorizes a payment and also signs the check. What control problem does this create?
A. Duplicate vendor
B. Segregation-of-duties conflict
C. UOM mismatch
D. Maverick spend
B. Segregation-of-duties conflict — Keeps one person from controlling everything.
A vendor asks AP to tell them the company’s invoice tolerance amount. What should AP do?
A. Tell them the exact amount
B. Give them an estimate
C. Keep it confidential
D. Ask Purchasing to disclose it
C. Keep it confidential — Prevents tolerance abuse.
An invoice bills for 10 dozen, but the PO says 120 each. What should AP check first?
A. VIDA
B. UOM conversion
C. Payment method
D. Discount terms
B. UOM conversion — Converts units like dozen vs. each.
AP tells a department, “If you do not tell us by Friday that the service was not received, we are processing the invoice.” What is this called?
A. Maverick spend
B. ERS
C. Negative assurance / assumed receipt
D. Two-way matching
ANSWER
C. Negative assurance / assumed receipt — Pay unless the purchaser objects.
A company wants a nonphysical, high-limit card account assigned to one major supplier. What is this called?
A. Travel card
B. Ghost card
C. Debit card
D. Single-use virtual card
B. Ghost card — Nonphysical card for specific vendors.
Why can frequent rush checks be risky?
A. They are illegal
B. They can bypass controls and increase duplicate risk
C. They cannot be reconciled
D. They always cost double
B. They can bypass controls and increase duplicate risk — Rush checks can create control problems.
An employee buys from any vendor they choose without following company purchasing policy or formal approval. What is this called?
A. Direct spend
B. Maverick spend
C. Assumed receipt
D. ERS
B. Maverick spend — Purchase made outside company policy.
AP receives an acknowledgment invoice confirming that the supplier received the order. What should AP do?
A. Pay it immediately
B. Match it to the PO and pay it
C. Do not process it for payment
D. Treat it as a credit memo
C. Do not process it for payment — It only confirms the order.
A company creates payment based on PO and receiving information without requiring the supplier to send an invoice. What process is this?
A. ERS
B. EFT
C. VIDA
D. Assumed receipt
A. ERS (Evaluated receipt settlement)— Pays without a supplier invoice.
What is SWIFT primarily used for?
A. Moving funds directly
B. Sending transaction instructions
C. Processing P-cards
D. Printing checks
B. Sending transaction instructions — SWIFT sends instructions, not funds.
A transaction matches a previous payment on vendor, invoice date, and amount, but the invoice number is different. What should AP do?
A. Pay it automatically
B. Investigate it as a possible duplicate
C. Treat it as a credit memo
D. Classify it as maverick spend
B. Investigate it as a possible duplicate — Three VIDA matches are a warning.
Which payment method combines purchasing and payment and usually does not require a supplier invoice?
A. ACH
B. P-Card
C. Wire transfer
D. Paper check
B. P-Card — Combines purchasing and payment without a supplier invoice.
What does VIDA stand for?
Vendor, Invoice, Invoice Date, Amount
Surveys cited in Chapter 5 say about 80% of invoice mismatches are caused by what?
A. Incorrect pricing
B. Duplicate invoices
C. Lack of receipt
D. Wrong payment method
C. Lack of receipt — Missing receiving information is a major cause of invoice mismatches.
A supplier receives a payment but cannot tell which invoices it is meant to cover. What information should AP send to help the supplier apply the payment correctly?
B. Remittance advice — Shows the supplier which invoices the payment covers.
A PO invoice has a price discrepancy outside the approved tolerance. Who should AP contact?
Purchasing — Handles PO price discrepancies.
Which payment method is usually the best choice when a supplier needs to receive funds within hours?
Wire transfer — Used for fast, high-priority payments.